I have often written articles regarding our national debt. It is estimated to be over $17 trillion. For perspective, all of the deposits in all of the banks in the United States total about $10 trillion! I am alarmed that both political parties seem to be content to let the debt continue to grow. Since President Obama was inaugurated five and a half years ago, our collective debt has grown by $7 trillion. Early in his term, the Republicans were railing against this rapid acceleration. However the Democrats were able to frame the discussion in such a way that, in the eye of the public, the Republicans looked like obstructionists to progress. Consequently the Republicans quit trying to make this an issue.
But it is an issue. Every day we add to that debt. The only reason that we have been able to continue to borrow our way out of cash flow problems is that the U.S. dollar is still the de facto world currency. That status allows us to continue to print dollars, essentially inflating our economy, and then pay debt back with those diluted dollars. It makes for a reasonable short-term solution, but it cannot be a long-term solution. Other countries with their own currencies will find an alternative world currency at some point. When that happens, the United States will no longer be able to print money to cover our increasing debt.
A related problem is the interest that we have to pay on that debt. We pay about the same amount of interest today that we were paying in the early 2000s, but now we have nearly twice the debt. Low interest rates have allowed us to pile up this significant debt, but what happens when interest rates return to more normalized levels? The reality is that we will be paying a much higher portion of our federal budget toward interest payments, meaning that we will have to cut other programs or continue to increase our debt by ever-growing proportions.
When politicians say that we are mortgaging the future of our children and grandchildren, this is what they are referring to. By refusing to live within our means — the way you and I have to, and businesses have to — our federal government is borrowing money today that will be repaid in the future. How will it be repaid? Either expenses will need to be reduced, or income will need to be increased. There are certainly many areas ripe for expense reduction, but that will require looking people in the eye and saying “no,” an act that few politicians have done in recent decades. Areas such as the military budget will be hard to reduce. Every time there is an effort, the reduction comes by closing military bases. This brings much opposition from the states or countries that benefit economically from these bases. However, the reality is that the United States spends more on defense than the rest of the world’s countries combined. Does the United States really need to spend that much to maintain a superior defense?
There is also much “pork” squandered in questionable grants for a variety of causes and issues. The infamous Bridge to Nowhere is an example. Various government programs that support research could be eliminated in many areas.
On the income side, it will be the age-old question of raising taxes and/or expanding the tax base. Non-taxpaying credit unions come to mind as a source of new revenue. Or we could lower taxes, with the idea that a larger economy will emerge, thus generating more tax revenue.
Regardless of how it is done, it must be done. We the people must demand that the federal budget become balanced, and that we begin to chip away at the debt. Today’s debt exceeds $54,000 for every person in the United States. That is too much of a burden to leave to our children and grandchildren. We need to make this a priority issue again as we talk to those running for election to Congress this fall.
– S. Joe DeHaven